Fries-Breslin Co. v. Star Fire Ins Co.

• Decision Date: 25 May 1907
• Docket Number: 23.
• Citation: 154 F. 35
• Parties: FRIES-BRESLIN CO. v. STAR FIRE INS. CO.
• Court: U.S. Court of Appeals — Third Circuit

154 F. 35

FRIES-BRESLIN CO. v. STAR FIRE INS. CO.

No. 23.

United States Court of Appeals, Third Circuit.

May 25, 1907

James Wilson Bayard and John G. Johnson, for plaintiff in error.

Arthur S. Arnold, for defendant in error.

Before DALLAS, GRAY, and BUFFINGTON, Circuit Judges.

BUFFINGTON Circuit Judge.

This case involves the construction of a policy of insurance issued in New Jersey to the Fries-Breslin Company, a corporation of that state, here called the plaintiff, by the Star Fire Insurance Company, a corporation of Kentucky, the defendant. The insurance was for a single premium, and was on plaintiff's factory situate in New Jersey, and sundry personal property contained therein, for the gross sum of $2,500. The policy provided:

'This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void, * * * if the subject of insurance be personal property and be or become incumbered by a chattel mortgage.' When the policy was issued, there were tow mortgages given by the plaintiff on its real estate and buildings, the machinery and fixtures, and the materials manufactured and in process of manufacture therein. Each mortgage was duly recorded under the laws of New Jersey, both as a real estate and as a chattel mortgage. The buildings and personal property were destroyed by fire. Suit was brought and a verdict had for the plaintiff, subject to the reserved question whether, under the provisions quoted, the existence of these mortgages invalidated the policy. The court's action in so holding and entering judgment non obstante veredicto in favor of the insurance company is here assigned for error.

The contention of the plaintiff, in substance is that this policy blank was not intended for a joint insurance of real and personal property, but only for the insurance of realty by itself or personalty by itself; that the avoidance clauses are drawn for such contemplated separate uses, and not for the joint insurance here involved-- consequently they have no application. We cannot so construe this policy. It is unreasonable to suppose the state of New Jersey, in adopting a single standard form of policy for insurance, intended to exclude its citizens from the common practice of covering by one policy both real and personal property. The provision 'if a building or any part thereof fall, except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease,' evidences the policy contemplated joint insurance of real and personal property. Moreover, the existence of incumbrances on property correspondingly reduces the interest of the insured in the preservation thereof, and tends to increase the hazard to the insurance company. If such incumbrances exist, a provision that...